SEC Moves to Settle Justin Sun Case With $10M Penalty for BitTorrent Owner

The U.S. Securities and Exchange Commission has taken steps to partially resolve the long-running enforcement case against crypto entrepreneur Justin Sun and several related entities, according to a proposed final judgment filed Wednesday in federal court in New York.

Under the suggested orderRainberry Inc., the company behind the BitTorrent protocol, would pay a $10 million civil penalty and accept an injunction banning the company from engaging in deceptive securities offering practices.

In return, the SEC will dismiss the remaining claims against Sun and affiliated entities, including the Tron Foundation and BitTorrent Foundation. The dismissal would be “with prejudice,” meaning the agency cannot file the same claims again.

In an email response, Tron representatives pointed this out Declutter to a public statement created by Sun on X.

“I am very pleased to confirm that the SEC has taken steps to dismiss all claims against me, the Tron Foundation and the BitTorrent Foundation,” Sun wrote on Thursday. “Today’s resolution brings closure, but I never stopped building. I will continue to focus on accelerating innovation in the US and around the world and look forward to working with the SEC to develop guidelines and regulations for crypto in the future.”

The filing represents a significant step toward closing a case first filed in 2023 that accused Sun and its companies of selling unregistered securities and manipulating the market for the TRX token through wash trading.

Rainberry agreed to the settlement without admitting or denying the allegations, a standard provision in SEC enforcement actions.

The proposed sentence must still be approved by a federal judge in the Southern District of New York.

The move comes as US regulators appear to be recalibrating their approach to crypto enforcement following the departure of former SEC Chairman Gary Gensler, whose tenure was marked by an aggressive push to apply securities law to the digital assets sector.

Sun has remained a prominent figure in crypto and recently drew attention to his ties to World Liberty Financial, a crypto firm with ties to allies of President Donald Trump.

The proposed settlement does not address these activities, but resolution of the case would remove some of the most visible regulatory overhang surrounding Tron’s founder and his companies.

The dismissal of Sun’s case is “outrageous,” said Amanda Fischer, policy director and COO at financial reform group Better Markets, who served as chief of staff to former SEC Chairman Gary Gensler.

“Although the SEC had overwhelming evidence against Sun and its crypto businesses, the commission reached an out-of-court settlement today,” she said. Declutter. “It is a face-saving measure given the scale and brazenness of Sun’s alleged fraud.”

She argued that the judge presiding over Sun’s case should reject the settlement, and that Congress should oversee the SEC’s decision.

The SEC did not immediately respond Declutter request for comment.

Editor’s note: Adds commentary from Amanda Fischer and Justin Sun’s public statement.